Feb 27, 2019

Jerome Powell wades into the deficit debate

Fed Chair Jerome Powell. Photo: Joshua Roberts/Getty Images

No one could have predicted that it would take two hours for a member of the Senate to prod Fed Chair Jerome Powell about the Fed's political independence — or that the U.S. deficit would be such a central point of yesterday's hearing.

Why it matters: Powell answered a handful of questions about the U.S. debt and then chimed in on the modern monetary theory debate — whether or not deficits matter for countries like the U.S. that print their own money.

"The idea that deficits don't matter for countries that can borrow in their own currency I think is just wrong ... U.S. debt is fairly high to the level of GDP — and much more importantly — it's growing faster than GDP, really significantly faster. We are going to have to spend less or raise more revenue."
— Powell, in response to Sen. David Purdue's question about MMT

The caveat: Powell called out "unsustainable" federal debt in his opening remarks. But in response to questions from senators, he emphasized that "decisions about spending and controlling spending and paying for it" are up to Congress, not the Fed.

What's next: Powell will face the House Financial Services Committee — the first Democratic-controlled body of Congress he's seen since becoming chairman — at 10 am ET.

Go deeper: Fed's Powell sees "conflicting signals" in economy

Go deeper

Updated 1 hour ago - Health

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

The number of deaths from the novel coronavirus surpassed 400,000 worldwide on Sunday morning, per Johns Hopkins.

By the numbers: Almost 6.9 million people have tested positive for COVID-19 globally and more than 3 million have recovered from the virus. The U.S. has reported the most cases in the world with over 1.9 million.

George Floyd updates

Protesters gather north of Lafayette Square near the White House during a demonstration against racism and police brutality, in Washington, D.C. on Saturday evening. Photo: Jose Luis Magana/AFP via Getty Images

Tens of thousands of demonstrators have been rallying in cities across the U.S. and around the world to protest the killing of George Floyd. Huge crowds assembled in Washington, D.C., Philadelphia and Chicago for full-day events on Saturday.

Why it matters: Twelve days of nationwide protest in the U.S. has built pressure for states to make changes on what kind of force law enforcement can use on civilians and prompted officials to review police conduct. A memorial service was held for Floyd in Raeford, North Carolina, near where he was born. Gov. Roy Cooper ordered all flags to fly at half-staff to honor him until sunset.

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 6,898,613 — Total deaths: 399,832 — Total recoveries — 3,087,714Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 1,920,061 — Total deaths: 109,802 — Total recoveries: 500,849 — Total tested: 19,778,873Map.
  3. Public health: Why the pandemic is hitting minorities harder — Coronavirus curve rises in FloridaHow racism threatens the response to the pandemic Some people are drinking and inhaling cleaning products in attempt to fight the virus.
  4. Tech: The pandemic is accelerating next-generation disease diagnostics — Robotics looks to copy software-as-a-service model.
  5. Business: Budgets busted by coronavirus make it harder for cities to address inequality Sports, film production in California to resume June 12 after 3-month hiatus.
  6. Education: Students and teachers flunked remote learning.